Create items for services you sell or buy

Service items can include professional fees or labor that you charge for or pay for. For example, you may charge clients for your consulting time, but pay for janitorial services.

If you charge for and pay for the same service

You can also set up a service item "on the fly" as you need it.

These instructions tell you how to add service items one at a time. Follow these steps if you are new to QuickBooks. Otherwise, you can use another window to add or edit multiple service items and paste from Excel.

To do this task

1. Go to the Lists menu and click Item List. Shortcut

2. Click Item at the bottom of the list and click New.

3 .In the New Item window, click the Type drop-down arrow and then click Service.

Important: You cannot change a service item to another item type.

4. Enter an item name or number.

What you enter here appears on the drop-down list of items when you are filling out a sales form or purchase order. Enter a name or number that will help you distinguish this item from all the others on the list.

5. If this item is a subitem of an existing service item, select the Subitem of checkbox and specify the parent item's name. See Creating subitems.

6. (Optional) If unit of measure is available, assign a unit of measure.

To do this Task
1.1 In the Unit of Measure section, click the drop-down arrow and then do one of the following:

2.2 Click an existing unit of measure (Single U/M Per Item mode) or an existing unit of measure set (Multiple U/M Per Item mode).

Base unit
The first unit defined in a unit of measure set and is usually the smallest unit of measure used for an item when purchasing it, tracking it in inventory, and selling it. In QuickBooks, the base units of items are used to count inventory, generate most inventory reports, and perform quantity-related calculations.

Important: When you create an inventory item, the cost, sales price, and on hand quantity you enter are all for the base unit.

Related unit
A unit defined by the number of base units it contains. For example, if the base unit is foot, a related unit might be yard, which is defined as containing three feet.

Related units make it possible to show quantities of the same item in different measurements in different places in QuickBooks. For example, you might purchase an item called Cable in spools, count that item in inventory by the foot, and sell it by the yard. By creating a unit of measure set with a base unit of foot and related units of spool (containing 500 feet) and yard, you can enter a quantity of spools on a purchase order, show the item in feet on inventory reports, and enter a quantity of yards on an invoice.

Unit of measure set
Consists of a base unit and any number of related units.

When you create a unit of measure set, you can also specify which unit of measure should appear by default when adding an item to a purchase form, a sales form, and a shipping pick list. You also give the set a name, such as "Length by the foot."

Once you've created a unit of measure set and assigned it to an item, you can easily convert to other units of measure within the set when you add the item to a transaction. Continuing with the previous example, if you add the Cable item to an invoice with a quantity of 10 yards, you could then convert that quantity to 30 feet or 0.06 spools.

Note: Unit of measure sets are available only when Multiple U/M Per Item is selected as the unit of measure mode.
or
Click and then complete the wizard to assign a new unit of measure.

Note: If you see the Enable button instead of a drop-down arrow, click Enable and then complete the wizard to turn unit of measure on and assign a unit to this item.

7. Enter a description.
This description will display on the sales and purchase forms. If the description varies, you can leave this field blank, set up a separate item for each possible description, or enter the most common description and change it on the sales or purchase forms as necessary.

8. Enter a rate for the service.
The amount can be either a flat fee or an hourly rate. If you purchase this service, enter the vendor's rate. If you sell this service, enter the rate you charge your customers. If the rate varies, you can leave this field blank, set up a separate item for each possible rate, or enter an estimate and change it on the sales or purchase forms as necessary.

9. (If you charge sales tax) Click the Tax Code drop-down arrow and choose the sales tax code you want to assign to this service item.
Note: The Tax Code option doesn't appear if you haven't set up QuickBooks to charge sales tax.
10. Click Custom Fields to fill in any custom fields that apply to this item.
11. Click the Account drop-down arrow and choose an income account for sales and an expense account for purchases.
12. If none of the income accounts is a good match, create a new one by choosing .
13. Save the item.

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